Krka ups sales 3%, net profit 17% to EUR 286.6m last year

Novo Mesto – The Novo Mesto-based pharmaceutical group Krka generated EUR 1.53 billion in revenue last year, up 3% compared to 2019, while net profit has been estimated at EUR 286.6 million, up 17% year-on-year, show the unaudited preliminary results released on Thursday.

CEO Jože Colarič said in the report that, despite the Covid-19 pandemic, Krka had managed to ensure uninterrupted operations, and provide supplies of pharmaceutical products in markets at all times.

Colarič noted that even though the pandemic had hindered marketing-and-sales activities, the Krka group recorded “best sales results ever”.

Net profit, estimated at over EUR 286 million, is also the highest so far, as the group obtained marketing authorisations for 20 new medicinal products, including the first one in China.

The core company increased sales of goods and services by 4% to EUR 1.45 billion, and net profit was also up by 4% to EUR 258.4 million, the report shows.

It also adds that last year, the Krka group’s overall investments amounted to almost EUR 230 million, including EUR 151.8 million of 10% of sales in 2020 for research and development.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 30% year-on-year to almost half a billion euros, while EBITDA margin reached 32.5%, up almost seven percentage points compared to 2019.

Product and service sales were up in all regions except Slovenia (-8%) and the overseas markets (-6%). Sales increased the most in East Europe, by 7% to EUR 517.2 million, followed by South-East Europe (+4% to EUR 199.4 million.)

East Europe accounted for 33.8% of total sales of the Krka group as the largest region in these terms, followed by Central Europe and West Europe with a 22.3% share each. Sales in Slovenia accounted for 5.6% of total sales.

In Slovenia, sales of products were up by 5%, while revenue from spa and tourism services was down by 25%, mostly due to the restrictive measures related to the epidemic, said Colarič.

Russia was the largest single market with EUR 326.9 million in sales, up 5% year-on-year. Expressed in the Russian ruble, the growth on the market was 17%.

In Ukraine, sales were up by 8% to EUR 86 million, and in Poland, the leading market for Krka in Central Europe, sales were up by 2% to EUR 163 million.

Sales of prescription pharmaceuticals amounted to EUR 1.3 billion at the group level, 4% more than in 2019, accounting for 85% of total product and service sales. All regions except the overseas markets saw sales growth and volume sales were up by 7%.

Colarič noted that the price of Krka share on the Ljubljana Stock Exchange had increased by 25% last year to reach EUR 91.40 at the end of December, with its market capitalisation standing at EUR 3 billion.

As for the plans for 2021, he said that sales were expected to reach EUR 1.53 billion and net profit EUR 265 million. Investments, mostly in the expansion and modernisation of production and infrastructure, are planned at EUR 114 million.

The group plans to increase the total number of employees by 1% in 2021, so the number of full-time employees is expected to exceed 12,000 by the end of the year.

The sick leave rate in the parent company in Slovenia did not increase significantly last year despite the epidemic, as it was up by 0.2 of a percentage point to 6.4%. Only 0.4% of total sick leave was related to Covid-19.

Colarič noted that the supervisory board had appointed him the CEO for the 2022-2027 term and had given him the mandate to form a new management board for that term. The appointment of the remaining board members is planned for November.

“In the second half of the year, we intend to review the five-year strategy and upgrade the goals. During the new term, we will lead Krka by following the course of an internationally established and innovative generic pharmaceutical company,” he said.